Faced with the perfect storm of a bleak market and a boom in ultra-budget portables, Apple is believed by some to be readying its own take on the netbook for the first half of 2009.

Analyst Ezra Gottheil from Technology Business Research (TBR) cautions that Apple may no longer have the luxury of keeping its notebook pricing high when many buyers are much more concerned about price than they were even a few months ago.

The company has until now insisted on keeping its prices largely unchanged and instead has upgraded the specifications of its systems to maintain that price. That has kept its average selling price high but has also all but locked the company out of the entry-level and developing-world markets; these are now being joined by cash-strapped customers even within the US, making it that much less likely any of them will pay Apple's minimum asking price. At $999, the least expensive MacBook is twice or more the cost of the most frugal Windows alternatives, Gottheil says.

Gottheil dismisses the notion of an artificial premium on Apple products, noting that they often compete well for the features, but is certain that the Cupertino, Calif.-based company has reached a breaking point where perceived quality can't override genuine financial woes from customers.

"It is too much to ask consumers to pay more than twice as much for a PC in these times," the analyst says.

Moreover, the market is also understood to be shifting away from the Mac's traditional price range. The sudden explosion in the popularity of netbooks -- portables with 10-inch or smaller screens that are often based around low-power processors and meant for basic Internet use -- has pushed the price of a notebook to as little as $300. Apple can't ignore this, Gottheil claims.

But while the Mac maker's chief Steve Jobs has argued that the iPhone is netbook-like in fulfilling many of the same online roles, the researcher believes that the desire for a keyboard ultimately the usefulness of the iPhone for certain software and that something more is necessary.

Instead, he and TBR are confident that Apple will release a computer in the netbook class within the first half of next year, but one that doesn't obey many of the rules dictated by the industry. Like the MacBook Air ultraportable, this future system would be at least as thin and light as others in its category but would potentially have a larger surface area to allow a larger display or more comfortable input. Netbook owners carry their systems "in stacks with papers and books" and care more about thickness than footprint, according to Gottheil.

Crucially, he also takes to heart Jobs' assertion that $500 systems are typically "junk" and believes that Apple will price the system at $599. The figure would be just low enough to draw customers who would pass over the plastic MacBook but high enough to avoid the risk Apple's co-founder perceives in dropping the price particularly low.

As with most Windows PC makers, Apple would reportedly have to accept the risk of cannibalizing sales for some of its more lucrative notebook models but could theoretically maintain its profit margins and continue to grow its Mac shipments ahead of the industry curve.

While the market conditions are widely accepted and are potentially supported by rumors of an unknown device being tested at Apple that would more closely fit the bill, Gottheil's statements do contradict some of Jobs' own beliefs about netbooks and Apple's role in the marketplace. He believes netbooks are part of a "nascent" category that may not pan out and has said he would be "surprised" if large volumes of notebook buyers shifted to the very bottom of the price spectrum and created problems for Apple.

Still, TBR's analyst warns that buyers, including those looking at Macs, were "more cautious" even in the summer and that Apple in its current position would gain share mainly at the expense of its revenue as users opt for less expensive models whenever possible.

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

Am I the only person getting tired of netbooks? Fine, they make ultraportable notebooks intended solely for browsing the Internet and responding to email. Great! Why do we keep hearing about how great they are? They're narrow-use products. I'm already tired of the term netbook, just like how I got tired of the terms like "Web 2.0" and "blog" years ago. Enough.

Snow Leopard and a rumored $99 iPhone are bigger deals than an Apple netbook.

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

My Touch costed less than $900. My guess is that Apple would love to sell Touches at $600. It will be interesting to see if they can make that a viable proposition by turning a Touch into a NetBook.

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

People like you are the reason there's a lot of hate for Mac users out there.

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

Mac Mini? Though it hasn't been updated for over a year and is pretty crappy specs-wise.

Analyst Ezra Gottheil from Technology Business Research (TBR) cautions that Apple may no longer have the luxury of keeping its notebook pricing high when many buyers are much more concerned about price than they were even a few months ago.

The company has until now insisted on keeping its prices largely unchanged and instead has upgraded the specifications of its systems to maintain that price. That has kept its average selling price high but has also all but locked the company out of the entry-level and developing-world markets; these are now being joined by cash-strapped customers even within the US, making it that much less likely any of them will pay Apple's minimum asking price. At $999, the least expensive MacBook is twice or more the cost of the most frugal Windows alternatives, Gottheil says.

Gottheil dismisses the notion of an artificial premium on Apple products, noting that they often compete well for the features, but is certain that the Cupertino, Calif.-based company has reached a breaking point where perceived quality can't override genuine financial woes from customers.

"It is too much to ask consumers to pay more than twice as much for a PC in these times," the analyst says.

[...]

Still, TBR's analyst warns that buyers, including those looking at Macs, were "more cautious" even in the summer and that Apple in its current position would gain share mainly at the expense of its revenue as users opt for less expensive models whenever possible.

I fully agree. It's great to see that some analysts analyse instead of speculate or push a stock in what is called a 'pump and dump' operation.

Like nearly all "journalists" this guy has no experience or financial education.

All economic slowdowns/recessions have a finite life. In the US the longest recession, since WWII, lasted 18 months. This one is now 12 months old. That means this has only 6 months to go before it too fades into our memories. That duration isn't anywhere near long enough to cause Apple any concern about "cash strapped" consumers.

This is just another bullsh*t article based on nothing more than the author's desire to generate hits.

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

A netbook will never happen from Apple i think, why? who the heck is gonna buy the $1700 Macbook air then?

Who wants one now? Whoever wanted it already has it. I don't think it something to aspire towards- an underperforming large sheet of metal. Small, not large is the way to go. Analysts have already stated it's underperforming for Apple.

Who wants one now? Whoever wanted it already has it. I don't think it something to aspire towards- an underperforming large sheet of metal. Small, not large is the way to go. Analysts have already stated it's underperforming for Apple.

Your interpretation of what the MBA is definitely different than what other people believe it is. You and many others continue to compare it machines that frankly, should not even be in the same league.

The MBA is selling quite well and I certainly love mine each and every time I use it. It may be a sheet of metal to you but it is by far the nicest , lightest and sturdiest sheet of metal I've ever owned. My previous laptops were Sony's, Dells, and Toshibas.

It's not the fastest but that is not the point of the MBA. People need to get over it already. You want faster performance, buy a different model. You want mobile performance, with light weight, long battery life and rock-solid design and superb quality, it's the perfect machine. You're not seeing why the MBA costs more than comparable laptops. People have been trained to accept only "cheap".

Go elsewhere to play Crysis, all-day DVD movies, or video editing. Apple did not design the MBA for you. It may come as a shock to you but there are plenty of individuals that see the value the MBA has. Even it today's crappy economy, I would still not pay $500-$700 for a piece of flimsy plastic junk that won't last more than a year with the abuse of my mobile life. My MBA is by far the best machine I've owned to date. It's truly a mobile laptop for business.

Am I the only person getting tired of netbooks? Fine, they make ultraportable notebooks intended solely for browsing the Internet and responding to email. Great! Why do we keep hearing about how great they are? They're narrow-use products. I'm already tired of the term netbook, just like how I got tired of the terms like "Web 2.0" and "blog" years ago. Enough.

The upshot of a netbook is that you can survive without your main computer for a period of time. For me, I have a 17" MBP and a AA1. I ride a bike to work; I need my computer at home to finish stuff up in the evening. I also fly a great deal, usually I am fortunate enough to fly business class. Both of these needs make a netbook a perfect solution:
-I shave 5 pounds off my pack weight during the week and when I am on the road.
-While the 17" fits on my tray on the plane, it makes it a pain to deal with getting in and out of the seat.
-While the power isn't quite what the MBP has, it's good enough to function.

Unfortunately, the AA1 is junk. I cringe when I use the touchpad, and the buttons are awful. The keyboard isn't as responsive as I would like, and I miss OS X. Paying 50% more for a well designed, well built, OSX machine is a good value for the consumer, and can have solid margins for Apple.

Netbooks don't make sense to many people. It's not a good market at all. And again these specialists are wrong. They think like all those PC companies. Apple will change rules again. I think touch-screen and more interactive control is the Apple's future.

I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!

I'm going to assume this is a troll. There are some snooty Mac users out there (definitely not the majority), but this is too much. Check out the word he goes out of his way to italicize and the fact that his username is "iPodrulz". Not only is that a ridiculous cliche, but no self-respecting Appleite would call himself such a thing AND go on to complain about the doomsday prospect of a sub-$900 portable.

Agree. I don't thing we wll see a Netbook per se, a Mac tablet at $599. More like a senior iTouch. No physical keyboard, only onscreen keypad for simple email replies. 4GB of flash and 120GB 1.8inch disk (the one in MBA), removable battery.
Apple will charge dearly for the extra and cables to make it useful. Mini bluetooth keyboard (new), we can use the wireless keyboard, cables @ $30 a peice for iPhone connection, cables for USB charging, cables for VGA/DVI/DP monitors, special fixed ethernet dongle, extra battery @$50 each.

Sound like the modern Apple does it not ?.

This secondary device for iPhone, iTouch, iPod and Macs will charge battery, provide second itunes library access, transfer documents. Many of the features Apple will not give on iPhone and iTouch!. Now that is value to Apple customers. So, how many will buy TWO ?.

In other news released today, it has been found that 100% of so-called analysts are "complete f*****g morons"

Agreed.

Once you know this idea comes from "a tech industry analyst" you realise that it falls into the "this is what I would do if I were Steve Jobs" category and that it's based on a lot of logical guessing that may or may not have anything to do with anything.

"Analysts" have been mostly dead wrong about Apple since it's inception.

Note how there is absolutely nothing in this report that is based on anything factual. What we need for a netbook rumour is actual inside information, not just another speculation by an "analyst."

In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...

I'm going to assume this is a troll. There are some snooty Mac users out there (definitely not the majority), but this is too much. Check out the word he goes out of his way to italicize and the fact that his username is "iPodrulz". Not only is that a ridiculous cliche, but no self-respecting Appleite would call himself such a thing AND go on to complain about the doomsday prospect of a sub-$900 portable.

Nicely done, anyway.

Satire he may be, but that fact that it isn't obvious (to me) doesn't speak well of the Apple community.

Netbooks ARE popular. Anyone in denial about this has their head in the sand. Some of Amazon's top selling products on Black Friday were netbooks! If you think netbooks are a product category that will go nowhere, you're very mistaken.

Since netbook popularity exploded, some very good models have been introduced (particularly the Samsung NC10). These aren't low-quality "pieces of junk." They're simply low-spec and low-cost, for people who don't need a 2.4GHz Core 2 Duo for $1300. Most people use their laptops to do pedestrian things like surf the net, watch videos and listen to music. And not everyone wants to do those things with a 3.5" touch screen.

I like OS X, but what sort of netbook can Apple offer for $599? Their more expensive notebooks regularly suffer from all sorts of problems. Why would I shell out $599 for Apple's netbook when it will more than likely suffer from case problems (Cracking, discoloring plastic? Wi-fi killing aluminum?), poor display quality, poor quality assurance, etc.

Steve says that Apple doesn't know how to make a notebook for $500 that isn't a piece of junk. The truth of the matter is that Apple simply doesn't want to lower its margins.

I'm a netbook user/fan. ... I like OS X, but what sort of netbook can Apple offer for $599? Their more expensive notebooks regularly suffer from all sorts of problems. Why would I shell out $599 for Apple's netbook when it will more than likely suffer from case problems (Cracking, discoloring plastic? Wi-fi killing aluminum?), poor display quality, poor quality assurance, etc. ....

I going to assume your not just being a troll here (cause you said you weren't), but this stuff above is just 100% BS.

You are faulting the company with the best design chops, the highest build quality and the highest customer satisfaction rate in the entire industry over the last 20 years or so (and they lead the pack by a huge amount in all three) for ...

poor quality products?

Absolute nonsense.

In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...

As a writer, it would be great to have something small that I could just have with me where ever I go, so that I could take notes, or jot down ideas as they come to me, no matter where I am. So, I have my own fantasy for an Apple netbook/tablet thing:

Basically, something about the size of a paperback novel, perhaps a slightly larger footprint, but small enough to fit inside a large coat pocket, and about a quarter-inch to half-inch in thickness. Machined aluminum, fully weather sealed, no moving parts. No physical ports of any kind. It would be powered via induction, and all communication would be via bluetooth, airport, -- and I heard that induction could also possibly handle data transmission. Basically, this thing would be a tank. I could drop it in my bag, and not worry about bits breaking off, or it being crushed among other gear or books. I could take it to the beach and not worry about salt corrosion, or sand getting into any ports, because there AREN'T any ports. Or, if I was sitting by the pool, and someone splashed water everywhere, it wouldn't be a disaster. I'd just wipe off the screen and continue doing what I was doing.
On the software side, a major upgrade to Apple's "Ink" software, so that it could "learn" my handwriting, which would enable me to jot down quick notes, and it would save the file both as a text file, and as a vector graphic of my actual writing strokes.
A stylus would be important, because, for jotting notes or drawing rough sketches, it would be much better to use a stylus than my finger.

And, of course, it could download movies or games to the SSD, so that I could watch movies on the plane, or stream them from my main computer when I'm at home (although, why would I want to watch movies on my tiny tablet if I'm at home, and can watch them on the main computer, or on TV? Because I could, that's why.)

I was not that impressed with the MacBook Air when it came out, because, while the thinness was amusing and mildly impressive, I didn't like that it had the same footprint as the 13" MacBook, which doesn't help when I have a cluttered desk, or limited space in my backpack.
Something with a smaller footprint than the Air, but large enough to serve as a decent web browser, word processor, movie player, e-reader, note-taker, photo album, would work great for me. I'd pay $599 to $999 for something like that.

I believe this category will grow in numbers. This product fills a need for many that don't need a full on notebook while traveling. Some discussion about the ability of this category to power OSX need only google MSI Wind OSX to discover that the migration of OSX to a netbook has already occurred. The MSI Wind runs on a Intel Atom and working well.